In today’s world, many businesses prioritize building an online presence over opening a brick-and-mortar retail outlet. Nasdaq estimates that by 2040, 95% of all purchases will be made online through e-commerce websites and applications.
Everything from office stationery to gold jewellery is available online. Given the many advantages of the online world, one would assume that all e-commerce players are profitable. Despite its market presence, even players like Amazon claim to be facing losses in the Indian market. Thus, e-commerce players must constantly find new ways to reduce costs and increase revenue while keeping their customers satisfied.
Is there a solution? Yes there and it is data validation.
What Exactly Is Data Validation?
Businesses get their data from many different sources “ customers enter details in web forms when creating accounts, invoices from the retail outlets, entries by customer service representatives, etc. Most of this data is entered manually and hence subject to human error. Businesses lose as much as $3.1 trillion each year only because of poor data.
Data validation involves comparing the information entered against that available in reliable third-party databases. For example, when a customer enters his street address, this may be compared to the address saved in the voter records. If the address does not match, the entry may be flagged.
If it is incomplete, information from the voter records may be taken to complete the entry. Data validation helps ensure that customer records are accurate, complete and timely. It also helps de-duplicate files and creates singular, comprehensive customer profiles.
How Does Data Validation Affect Costs?
Improved Last-Mile Delivery
To see success, businesses must find a way to minimize their costs without compromising on the product or service quality. Costs such as those involved in picking up returns, or orders that cannot reach the customer because of errors in the address can be minimized by validating data.
Using address verification software, you can ensure that the addresses orders are being shipped to are correct, complete and deliverable. For example, a customer may have forgotten to enter the floor number. Such details can be added when validating the customer’s address data. Without them, the delivery agent may have trouble reaching the customer and orders may go undelivered affecting costs and customer satisfaction.
Fraud Prevention
Validation also protects companies from fraud. A report predicts that by 2023, Card-Not-Present fraud will increase by 14% and the expected losses for retailers could be as high as $130 billion! This is a cost that can be easily minimized by verifying customer identities.
This involves authenticating the customer’s identity by verifying names, phone numbers, emails, addresses, etc. Identity verification doesn’t just keep fraudsters away but also helps businesses comply with KYC and AML regulations. In turn, this lowers the risk of having to pay fines and penalties.
Can Data Validation Increase Revenue?
Improved Marketing ROI
Along with minimizing costs, businesses must also work on increasing their revenue. Data validation plays a key role in improving marketing ROI. For example, email marketing is considered budget-friendly and low cost. But, sending emails out to the wrong addresses can be a waste of resources as the emails bounce back and customers don’t get the company‘s message.
Similarly, cold calling is one of the most common ways for businesses to reach out to potential customers. But having the wrong numbers in your database can cost you time, effort and money. By validating data, companies can ensure that the contact details they have on file are correct and thus prevent this type of resource wastage.
Better Audience Segmentation
Validating data also makes it reliable and helps segment the audience correctly. For marketing tools like emailer campaigns to be effective, audience segmentation is key. So, when you’re designing monthly emailers, you could send email a promoting one type of product to customers in one location and email B promoting another type of product to customers in another location. This makes the emails relevant to your customers and increases the chances of them making a purchase and in turn, increasing your revenue.
Data Validation And Customer Satisfaction
Holistic Customer Profile
The trouble with having duplicate records is not just an inflated database but also a fragmented view of the customer. Let’s say a customer signed in to the website and app with different names but the same email address and thus created two records.
The customer added a product to their cart on the website but didn’t complete the purchase. Later, she ordered the product through the app. Because the company has duplicate records, it sends reminder emails to the customer to complete the order on the website. Such emails can be frustrating for the customer and affect their loyalty to the brand. By de-duplicating records, businesses can avoid such situations.
Personalized Service
Validating customer data goes a long way in improving the way you personalize the customer’s experience. Did you know that 52% of B2C buyers say they’re likely to switch to competitor brands if they don’t receive personalized communication?
Businesses that want to retain customers can no longer afford to send emails addressed to sir/madam or misspell the customer’s name. With data validation, you can not only get to know the correct way to address the customer and get assured means of communicating with them but you also get reliable data from which you can make inferences about the types of products and services they may need. For example, grocery retailers could send targeted advertisements for organic food to customers living in affluent neighborhoods.
Data Validation- The Route Ahead
Data validation has numerous advantages and can give e-commerce companies an edge over the competition in terms of customer satisfaction as well as revenue. Whether your company is just starting out or an established multi-national, data validation is critical to maintaining a reliable customer database.
The good news is that there are a number of tools that can help with the process, after all, data verification is not a one-time exercise. In addition to validating data when it enters the database, all records within the database must be regularly verified to prevent data decay and maintain data quality standards.
